Ontario signed a $7 billion deal Thursday with a consortium led by South Korean industrial giant Samsung Group and Korea Electric Power Corp. to build 2,500 megawatts of wind and solar power.

The first stage of the project, scheduled for completion by the first quarter of 2013, includes a 500 megawatt cluster -- 400 megawatts in wind and 100 megawatts in solar -- to be built in Southern Ontario. The resulting capacity will help to replace power currently provided by a coal plant due to be decommissioned by 2014.

The plan also calls for Samsung to establish a base of operations to manufacture wind and solar equipment to export clean electricity to the growing green-energy market in North America.

Under the terms of the agreement, Samsung must build four manufacturing plants in Ontario, promising 16,000 direct and indirect jobs over the next five years.

"Ontario is taking a giant step forward in the green economy," Premier Dalton McGuinty told reporters Thursday in announcing the deal.

McGuinty said the Samsung investment would place Ontario as a leader in the production of renewable energy hardware, including wind turbines, solar inverters and solar modules.

"Ontario is officially the place to be for green energy manufacturing in North America," McGuinty said, pointing out that the recently passed Ontario Green Energy Act means that renewable energy developers in the region can also access generous subsidies for clean energy production.

If it fulfills its obligation to create 16,000 jobs, Samsung will receive $437 million in incentive payments over the 25-year life of the deal.

The $437 million sweetener is in addition to Ontario's rate guaranteed last spring to all new players in the renewable energy sector under its feed-in tariff program, which offers as much as 80.2 cents per kilowatt hour for solar power.

Ontario will also guarantee Samsung priority access to the province's already tight electricity grid, the Ottawa Citizen newspaper reports.

For the province's electricity customers, the Samsung project means an extra $1.60 a year on electricity bills for 25 years.

Ontario, in selecting Samsung without an open tendering process, has irked domestic green energy producers who say the province has undermined a once equitable marketplace.

"This throws the whole sector into turmoil," said David Butters, president of the Association of Power Producers of Ontario, the Ottawa Citizen newspaper reports. "Now we've got two classes of people: Samsung, and those who are left behind."

"It's a game-changing announcement," Butters said. "It changes the way in which we've been doing business."